Employee Benefit Plans

12 Months Ended

Aug. 26, 2023

Postemployment Benefits [Abstract]

Employee Benefit Plans

7. Employee Benefit Plans

Defined Contribution Retirement Savings Plan

The Company has a defined contribution retirement savings plan with a 401(k) feature for all eligible U.S. and Canadian employees not under collective bargaining agreements. The Company matches a portion of the employee’s contribution and may make an additional contribution at its discretion. Contributions charged to expense under the plan for fiscal 2023, 2022 and 2021 were $18.7 million, $18.2 million and $19.9 million, respectively.

Pension Plan and Supplemental Executive Retirement Plan

The Company accounts for its pension plan and Supplemental Executive Retirement Plan on an accrual basis over employees’ estimated service periods.

The Company maintains an unfunded Supplemental Executive Retirement Plan (“SERP”) for certain eligible employees of the Company. The benefits are based on the employee’s compensation upon retirement. The amount charged to expense related to this plan amounted to approximately $1.7 million, $1.5 million and $2.9 million for fiscal 2023, 2022 and 2021, respectively.

The Company maintains a non-contributory defined benefit pension plan (“UniFirst Plan”) covering employees at one of its locations. The benefits are based on years of service. The UniFirst Plan assets are invested in a Guaranteed Deposit Account (“GDA”) that is maintained and operated by a third-party investment manager. The amount charged to expense related to this plan amounted to approximately $0.1 million, $0.1 million and $0.2 million for fiscal 2023 fiscal 2022 and 2021, respectively.

The components of net periodic benefit cost for fiscal 2023, 2022 and 2021 were as follows (in thousands):

	UniFirst Plan									SERP
	2023			2022			2021			2023		2022			2021
Service cost	$	73		$	72		$	71		$	486	$	919		$	1,100
Interest cost		147			104			104			1,191		928			943
Expected return on assets		(101	)		(118	)		(131	)		—		—			—
Amortization of prior service cost		21			21			55			—		—			—
Amortization of net loss		—			20			36			—		516			821
Other events		(12	)		(10	)		49			—		(855	)		—
Net periodic benefit cost	$	128		$	89		$	184		$	1,677	$	1,508		$	2,864

The Company’s obligations and funded status as of August 26, 2023 and August 27, 2022 were as follows (in thousands):

	UniFirst Plan						SERP
	2023			2022			2023			2022
Change in benefit obligation:
Projected benefit obligation, beginning of year	$	3,837		$	5,035		$	27,562		$	36,644
Service cost		73			72			486			919
Interest cost		147			104			1,191			928
Actuarial gain		(220	)		(861	)		(2,811	)		(8,871	)
Benefits paid		(17	)		(23	)		(1,309	)		(1,203	)
Settlements/Curtailments		(271	)		(490	)		—			(855	)
Projected benefit obligation, end of year	$	3,549		$	3,837		$	25,119		$	27,562
Change in plan assets:
Fair value of plan assets, beginning of year	$	3,300		$	3,796		$	—		$	—
Actual return on plan assets		(26	)		17			—			—
Benefits paid		(17	)		(23	)		—			—
Settlements/Curtailments		(271	)		(490	)		—			—
Fair value of plan assets, end of year	$	2,986		$	3,300		$	—		$	—
Funded status (net amount recognized)	$	(563	)	$	(537	)	$	(25,119	)	$	(27,562	)

As of August 26, 2023 and August 27, 2022, the accumulated benefit obligations related to the UniFirst Plan were $3.5 million and $3.8 million, respectively. As of August 26, 2023 and August 27, 2022, the accumulated benefit obligations related to the SERP were $22.5 million and $24.6 million, respectively.

The amounts recorded on the Consolidated Balance Sheet as of August 26, 2023 and August 27, 2022 were as follows (in thousands):

	Pension Plans					SERP
	2023			2022		2023			2022
Deferred tax (liabilities) assets	$	(16	)	$	184	$	(904	)	$	(10	)
Accrued liabilities		563			537		25,119			27,562
Accumulated other comprehensive income (loss)		46			40		2,628			(720	)

As of August 26, 2023 and August 27, 2022, the amounts recognized in accumulated other comprehensive loss were as follows (in thousands):

	UniFirst Plan						SERP
	2023			2022			2023		2022
Net actuarial (loss) gain	$	(94	)	$	(75	)	$	3,531	$	(720	)
Unrecognized prior service cost		156			115			—		—
Accumulated other comprehensive income (loss)	$	62		$	40		$	3,531	$	(720	)

The weighted average assumptions used in calculating the Company’s projected benefit obligation as of August 26, 2023 and August 27, 2022, were as follows:

	UniFirst Plan						SERP
	2023			2022			2023			2022
Discount rate		5.1	%		4.3	%		5.2	%		4.4	%
Rate of compensation increase	N/A			N/A				5.0	%		5.0	%

The weighted average assumptions used in calculating the Company’s net periodic service cost for fiscal 2023, 2022 and 2021 were as follows:

	UniFirst Plan									SERP
	2023			2022			2021			2023			2022			2021
Discount rate		4.3	%		2.3	%		2.0	%		4.4	%		2.6	%		2.5	%
Expected return on plan assets		3.5	%		3.5	%		3.5	%	N/A			N/A			N/A
Rate of compensation increase	N/A			N/A			N/A				5.0	%		5.0	%		5.0	%

The benefit payments, which reflect expected future service, that are expected to be paid for the five fiscal years subsequent to August 26, 2023 and five years thereafter are as follows (in thousands):

	UniFirst Plan		SERP
2024	$	767	$	1,509
2025		317		1,567
2026		312		1,695
2027		135		1,752
2028		236		1,676
2029-2033		1,191		8,396

Nonqualified Deferred Compensation Plan

The Company adopted the NQDC Plan effective on February 1, 2022. The NQDC Plan is an unfunded, nonqualified deferred compensation plan that allows eligible participants to voluntarily defer receipt of their salary and annual cash bonuses up to approved limits. In its discretion, the Company may credit one or more additional contributions to participant accounts. NQDC Plan participants who are not accruing benefits under the Supplemental Executive Retirement Plan are eligible to have discretionary annual employer contributions credited to their NQDC Plan accounts. All participants are also eligible to have employer supplemental contributions and employer discretionary contributions credited to their NQDC Plan accounts. The amounts of such contributions, if any, may differ from year to year and from participant to participant. The amounts for employee or employer contributions charged to expense related to the NQDC Plan for fiscal 2023 and fiscal 2022 were $0.3 million and nominal, respectively. The Company, at its discretion, may also elect to transfer funds to a trust account with the intention to fund the future liability. Total NQDC Plan assets were $2.0 million and $1.3 million as of August 26, 2023 and August 27, 2022, respectively, and are included within other long-term assets in the accompanying Consolidated Balance Sheet. Total NQDC Plan liabilities were nominal as of each August 26, 2023 and August 27, 2022 and are included within current accrued liabilities in the accompanying Consolidated Balance Sheet.